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This Grad Student Improved His Credit Score From The Low 500s to 800 Using This Free App.

Improving Credit Score
Financial discipline and credit awareness are effective habits to a secure future Buro Millennial/pexels.com

Alex O'Brien's story of improving his credit score from the low 500s to 800 is a solid example of discipline and credit awareness. At 18, Alex was taken aback when his car loan application was rejected due to a low credit score in the 500s. Just like most grad students, he felt like owning a car and had no credit awareness. Now, his credit score is above 800 and is supporting his wife to finish school while raising their newborn baby.

Focus on Credit Awareness

Alex knew he had to learn more about his low credit score and find ways to improve it. He came across Credit Sesame, an automated credit monitoring app, and signed up for a free membership. They go for a soft pull so that your credit score stays unaffected.

He got swift access to his credit score, credit report, and also a credit strategy for debt management for free- no credit card required. He also got access to stats like credit utilization, credit mix, and hard inquiries into his credit profile. This helped him understand the negative factors that were affecting his credit score.

Alex learned that a cable TV provider accidentally sent his account to the collection agency. Though he didn't have any pending dues, At age 18, with no significant credit history, Alex had his name on the defaulter list, which adversely affected his credit score.

An Accurate Credit Report is Crucial for Improving Credit Score

To fix errors on your credit report, you need access to an accurate and updated credit report. Credit Sesame offers you a credit report generated by TransUnion (a major credit bureau) and updates it for free every month.

To prevent further harm, Alex wrote to the collection agency and contacted the major credit bureaus regarding the wrong entries. His issue was resolved within 30 days, and the credit score jumped to 600!

Never Max Out on Credit Cards

Credit Card debt
Maxing out credit cards on unnecessary purchases can wreak havoc to your credit score. Andrea Piacquadio/pexels.com

Alex used Credit Sesame to find credit cards based on his profile. The app uses advanced algorithms to run your credit profile against countless financial products offered by major banks and displays the best offers you're eligible for.

He learned that credit utilization and payment history represents 70% of the credit score. As a responsible credit card holder, Alex frequently checks his credit balances and avoids making purchases out of his budget. He uses them smartly to increase rewards points.

Credit Sesame is an all-in-one app (iOS and Andriod compatible) for credit monitoring and improvement. This AI-powered automated personal debt management system helps you keep tabs on debit and credit balances at all times.

Credit Health Depends on Credit Mix

A successful credit mix is the ability to use a variety of credit types such as credit cards, auto loans, mortgage, etc. without defaulting on payments and degrading your lifestyle. Alex was ramping up his credit score and added two car loans in the credit mix. A diverse combination of financial products kept his credit score high.

Also, frequently applying for financial products leads to multiple hard inquiries, which negatively affects your credit score.

Takeaway

Financial Freedom
Work hard and have credit awareness to enjoy a carefree life with your family. Daria Obymaha/pexels.com

Alex believes that developing simple yet effective habits like paying on time, avoiding debt, and tracking your expenditures can go a long way to improving your credit score. He is now living debt-free and getting closer to buying a house for his wife and newborn baby.

"I've always been cautious about my spending and saving," says Alex. I learned from my parents to avoid spending money if you don't have it."

Alex uses his free Credit Sesame account at least once a month to check his credit utilization, credit mix, credit inquiries to understand his scope for improvement.

Credit Sesame has amassed 15 million members since its inception in 2010. According to their reports, 27% notice a jump of 10 points in the first month, and 61% of all users see improvements in six months. If you're curious, sign up within 90 seconds and get free access to your complete credit report.

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